Deepak Chopra, OSI Systems’ Chairman and Chief Executive Officer,
stated, “We are pleased with the first quarter performance as we
delivered record first quarter revenues and solid profit. Our growing
backlog and strong book-to-bill ratio reflect a robust pipeline of
opportunities, putting us in good position for the remainder of fiscal
2019.”

The Company reported revenues of $266.2 million for the first quarter of
fiscal 2019, an increase of 4% from the $257.1 million reported for the
first quarter of fiscal 2018. Net income for the first quarter of fiscal
2019 was $9.4 million, or $0.50 per diluted share, compared to net
income of $10.2 million, or $0.52 per diluted share, for the first
quarter of fiscal 2018. Non-GAAP net income for the first quarter of
fiscal 2019 was $15.3 million, or $0.81 per diluted share, compared to
non-GAAP net income for the fiscal 2018 first quarter of $15.5 million,
or $0.79 per diluted share.

During the quarter ended September 30, 2018, the Company’s book-to-bill
ratio was 1.2. As of September 30, 2018, the Company’s backlog was
$1.035 billion as compared to $976 million as of June 30, 2018.

Mr. Chopra commented, “Our Security division achieved record first
quarter revenues of $170 million, with strong operating profit. Bookings
were robust, leading to significant growth in our backlog. We continue
to be well positioned in the global marketplace to capitalize on future
opportunities.”

Mr. Chopra continued, “Our Optoelectronics and Manufacturing division
performed well as sales increased 20% over the same prior-year period,
inclusive of acquisitions. A strong mix of revenues and operational
execution led to significant year-over-year operating margin expansion.”

Mr. Chopra concluded, “Although we were disappointed by the financial
results in our Healthcare division, we remain dedicated to improving our
competitive position. We are focused on enhancing our core products,
developing new products, and growing the supplies and accessories
business.”

Fiscal Year 2019 Outlook

The Company is raising its fiscal year 2019 sales guidance to a range of
$1.140 billion to $1.175 billion, which would represent growth of 5% to
8% compared to the prior fiscal year. The Company is also increasing its
non-GAAP earnings guidance to $3.85 to $4.05 per diluted share for
fiscal 2019. Actual sales and non-GAAP diluted earnings per share could
vary from this guidance due to factors discussed under “Forward-Looking
Statements” or other factors.

The Company’s fiscal 2019 diluted earnings per share guidance is
provided on a non-GAAP basis only. The Company does not provide a
reconciliation of non-GAAP diluted EPS guidance to GAAP diluted EPS (the
most directly comparable GAAP measure) on a forward-looking basis
because the Company is unable to provide a meaningful or accurate
compilation of reconciling items and certain information is not
available. This is due to the inherent difficulty and complexity in
accurately forecasting the timing and amounts of various items that
would be excluded from GAAP diluted EPS, including, for example,
acquisition costs and other non-recurring items that have not yet
occurred, are out of the Company’s control or cannot be reasonably
predicted. For the same reasons, the Company is unable to address the
probable significance of unavailable information which may be material
and therefore could result in GAAP diluted EPS, the corresponding GAAP
financial measure, being materially less than projected non-GAAP diluted
EPS.

Presentation of Non-GAAP Financial Measures

This earnings release includes a presentation of non-GAAP net income,
non-GAAP diluted earnings per share, non-GAAP operating income (loss) by
segment and non-GAAP operating margin, all of which are non-GAAP
financial measures. The presentation of these non-GAAP figures for the
three months ended September 30, 2017 and 2018 is provided to allow for
the comparison of the underlying performance of the Company, net of
restructuring and other charges (including certain legal costs),
amortization of intangible assets acquired through business acquisitions
and non-cash interest expense related to convertible debt, and their
associated tax effects, and the impact of discrete income tax items.
Management believes that these non-GAAP financial measures provide (i)
additional insight into the ongoing operations of the Company, (ii)
meaningful supplemental information regarding the Company’s results
(excluding amounts management does not view as reflective of ongoing
operating results) for purposes of planning, forecasting and assessing
the performance of the Company’s businesses, (iii) a meaningful
comparison of results of the current period against results of past
periods and (iv) financial results that are comparable to those of peer
companies. Non-GAAP financial measures should not be assessed in
isolation or as a substitute for measures of financial performance
prepared in accordance with GAAP. These non-GAAP measures may not be the
same as similar measures used by other companies due to possible
differences in method and in the items or events for which adjustments
are made.

Reconciliations of GAAP to non-GAAP financial information are provided
in the accompanying tables. The financial results calculated in
accordance with GAAP and reconciliations from those financial results
should be carefully evaluated.

Conference Call Information

The Company will host a conference call and simultaneous webcast
beginning at 1:30 p.m. PT (4:30 p.m. ET) today to discuss its results
for the first quarter of fiscal 2019. To listen, please visit the
Investor Relations section of the OSI Systems website, http://investors.osi-systems.com/index.cfm
and follow the link that will be posted on the front page. A replay of
the webcast will be available shortly after the conclusion of the
conference call until November 9, 2018. The replay can either be
accessed through the Company’s website, www.osi-systems.com,
or by telephonic replay by calling 1-855-859-2056 and entering the
conference call identification number ’1893716’ when prompted for the
replay code.

About OSI Systems

OSI Systems is a vertically integrated designer and manufacturer of
specialized electronic systems and components for critical applications
in the homeland security, healthcare, defense and aerospace industries.
The Company combines more than 40 years of electronics engineering and
manufacturing experience with offices and production facilities in more
than a dozen countries to implement a strategy of expansion into
selective end-product markets. For more information on OSI Systems or
its subsidiary companies, visit www.osi-systems.com.
News Filter: OSIS-E

Forward-Looking Statements

This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Forward-looking statements
relate to the Company’s current expectations, beliefs and projections
concerning matters that are not historical facts.Forward-looking
statements are not guarantees of future performance and involve
uncertainties, risks, assumptions, and contingencies, many of which are
outside the Company’s control and which may cause actual results to
differ materially from those described in or implied by any
forward-looking statement. Forward-looking statements include, but are
not limited to, information provided regarding expected revenues,
earnings, growth, and performance in fiscal 2019. In addition, the
Company could be exposed to a variety of negative consequences as a
result of delays related to the award of domestic and international
contracts; failure to secure the renewal of key customer contracts;
delays in customer programs; delays in revenue recognition related to
the timing of customer acceptance; unanticipated impacts of
sequestration and other U.S. Government budget control provisions;
changes in domestic and foreign government spending and budgetary,
procurement and trade policies adverse to the Company’s businesses;
global economic uncertainty; unfavorable currency exchange rate
fluctuations;effect of changes in tax legislation;market
acceptance of the Company’s new and existing technologies, products, and
services; the Company’s ability to win new business and convert orders
received to sales within the fiscal year; enforcement actions in respect
of any noncompliance with laws and regulations, including export control
and environmental regulations and the matters that are the subject of
some or all of the Company’s ongoing investigations and compliance
reviews; contract and regulatory compliance matters, and actions, if
brought, resulting in judgments, settlements, fines, injunctions,
debarment, or penalties; and other risks and uncertainties, including,
but not limited to, those detailed herein and from time to time in the
Company’s Securities and Exchange Commission filings, which could have a
material and adverse impact on the Company’s business, financial
condition, and results of operations. For additional information on
these and other factors that could cause the Company’s future results to
differ materially from those in any forward-looking statements, see the
section titled "Risk Factors" in the Company’s most recently filed
Annual Report on Form 10-K and other risks described therein and in
documents subsequently filed by the Company from time to time with the
Securities and Exchange Commission. Undue reliance should not be placed
on forward-looking statements, which are based on currently available
information and speak only as of the date on which they are made.The
Company assumes no obligation to update any forward-looking statement
made in this press release that becomes untrue because of subsequent
events, new information, or otherwise, except to the extent it is
required to do so in connection with requirements under federal
securities laws.